Canopy Growth Corp. to acquire Mettrum in Canadian marijuana mega-deal

The roll-up in the Canadian marijuana space has begun a little earlier than many might have expected.

Wednesday night, publicly traded Licensed Producer Canopy Growth Corp. (TSX:CGC) announced it would acquire peer Mettrum (TSXV:MT) in a deal valued at approximately C$430 million. The move is the latest and boldest for the company that last month became Canada’s first billion dollar marijuana company, by market capitalization.

Canopy CEO Bruce Linton said the deal is all about scale.

“From day one, Canopy Growth has viewed production capacity, brand diversity, and highly-skilled management as the foundational aspects of our business,” he said. “Mettrum has established a line of cannabis products that work well in a medical context and will transition naturally into a natural and healthy lifestyle market. Their substantial production facilities will add to our growing production platform as we expand to meet the needs of patients, and their experienced personnel will help Canopy Growth drive our vision forward to the next level. Both Canopy Growth and Mettrum have proven themselves with Canadian patients; and together we intend to make our industry-leading product and service offering even stronger, while developing our common hemp objectives.”

Canopy cites cost and revenue synergies, improved scale and a diversified portfolio of cannabis brands as some of the reasons behind the deal.

The Mettrum deal comes on as the ink is just drying on Canopy’s acquisition of German-based pharmaceutical distributor MedCann for 674,631 common shares.

Canopy rise has been nothing less than meteoric. Tonight’s deal comes just two-and-a-half years after it began to trade publicly as Tweed Marijuana. The company went public through a comparatively humble reverse merger than netted it $30-million and management set about turning a former Hershey’s chocolate plant in Smiths Falls, Ontario into a marijuana empire.

It wasn’t long before Tweed was making moves that surprised the market. A few months after its public listing the company announced it would acquire Bedrocan Cannabis, a Canadian licensee of Dutch government-contracted licensed producer Bedrocan BV, in a deal valued at approximately $61.0-million.

By September of 2015, the company had renamed itself Canopy Growth Corp., with the Tweed and Bedrocan brands continuing to operate as distinct entities, an arrangement that was cemented when Tweed struck a three year branding deal with Snoop Dogg a few months later.

Mettum’s CEO says he has watched Canopy from close range.

“Canopy Growth and Mettrum have enjoyed a collaborative industry relationship working on a number of patient and industry advocacy efforts,” said CEO Michael Haines. “Combining our companies’ complimentary market strengths, and management expertise, should result in a more dynamic company well-positioned for emerging recreational and international opportunities.”

About Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.